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35% Surge In Sales Smashes New York Apartment Prices To Record High

Tyler Durden's picture




 

"We're seeing basic Econ 101 coming into play," says one New York realtor, "when you have this much demand and so little inventory, prices will have to rise. And they have." And, as Bloomberg reports, that is definitely the case as Manhattan apartment sales surged 35% in the busiest start to a year since 2007, setting price records with the average price per square foot rose 24% to $1,363, the highest in 25 years of record-keeping. As a large broker noted, "we're finally at a point where you're seeing the chronic lack of supply push prices higher," adding "the market really isn’t fun for the buyer." But that freshly printed money from the world's central banks to the world's oligarchs has to go somewhere...

Via Bloomberg,

Sales of co-ops and condominiums in the first quarter jumped 35 percent from a year earlier to 3,307, according to a report today from appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. The median price climbed 19 percent to $972,428, while the the average price per square foot rose 24 percent to $1,363, the highest in 25 years of record-keeping.

 

Price gains are accelerating in a market where the inventory of homes for sale plummeted to record lows three times in the past year as buyer demand increased.

 

...

 

About 50 percent of deals in the quarter were completed with cash, Miller estimated.

 

...

 

There’s been a real escalation in prices,” he said. “We knew it was going to come and now we’re starting to see it. The biggest question is why it took this long.”

 

...

 

On the Upper West Side, the increase in average prices ranged from 10 percent for two-bedroom apartments to 24 percent for one-bedroom units, according to the Brown Harris and Halstead report.

 

“I have buyers who need to finance, and unfortunately they find themselves losing out a lot to cash deals on a regular basis,” said Scott Harris, a broker with Brown Harris Stevens who handled the Wolfs’ co-op sale.

Nope, no bubble here... all seems very sustainable...

 

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Wed, 04/02/2014 - 08:48 | 4616765 Squid Viscous
Squid Viscous's picture

So many assholes crammed onto such a small island...

Wed, 04/02/2014 - 09:15 | 4616878 The Juggernaut
The Juggernaut's picture

Dumping dollars!

Wed, 04/02/2014 - 09:32 | 4616959 SafelyGraze
SafelyGraze's picture

"when you have this much demand and so little inventory, prices will have to rise."

unless you have an ETF to draw off speculative dollars in the amount of 100x the underlying physical

hence our new NYC rental-unit trading vehicle platform, which provides exposure to the underlying rent-cost-structure action

and gives you a collaterizable security you can borrow against

hugs,
mario 

Wed, 04/02/2014 - 12:25 | 4617619 matt atsinger
matt atsinger's picture

Congrats, you could have not explained it with fewer more precise words. Instead of Hymietown it will soon all be Chinatown.

 

L'Chaim

Wed, 04/02/2014 - 09:25 | 4616935 Bangin7GramRocks
Bangin7GramRocks's picture

Most of them criminals, smelling each other's farts and describing the aromatic bouquet. It's a great time in history to be a scoundrel!

Wed, 04/02/2014 - 10:54 | 4617292 IridiumRebel
IridiumRebel's picture

So glad I moved, the cost of living is ridiculous. Now that we live in rural Ohio, we have three bills. In NY, we had bills for everything. We just got a tax bill from last year for my income adjustment. The adjustment? I had healthcare and that was seen as income so they dropped a 350 dollar bill on us. Fuck NY. The NYers are actually cool, but the taxation and costs are not worth it. 

Wed, 04/02/2014 - 08:47 | 4616766 ebworthen
Wed, 04/02/2014 - 08:48 | 4616768 lordbyroniv
lordbyroniv's picture

I love how in NYC you have to spend hundreds of thousands / millions....

 

and your interest is a co-op [shares of stock] or a condo [not a real property interest].

 

What utter nonsense NYC is.

 

ONE BIG BEZZLE TO RULE THEM ALL.

Wed, 04/02/2014 - 08:52 | 4616773 Mercury
Mercury's picture

Nope, no bubble here... all seems very sustainable...

 

Well, it's either a bubble or a game of hard-asset musical chairs right before the music stops.

Wed, 04/02/2014 - 08:53 | 4616788 medium giraffe
medium giraffe's picture

Option B for sure.

Wed, 04/02/2014 - 08:52 | 4616784 buzzsaw99
buzzsaw99's picture

hope they have an extra bag of money to give to bloomturd every year

Wed, 04/02/2014 - 08:52 | 4616786 Mediocritas
Mediocritas's picture

How much of this is Chinese money fleeing the "corruption" crack-down?

Same thing happened with the USSR. Loads of corrupt insiders shifted money (and family) out of the country to keep clear of overly-enthusiastic believers in communism, then when it all fell apart said money came flooding back in to snap up quality assets for cheap from people who'd lived a lifetime of not knowing proper pricing.

Wed, 04/02/2014 - 08:54 | 4616790 Platinum
Platinum's picture

Smash smash smash!!

Wed, 04/02/2014 - 08:57 | 4616799 Bill of Rights
Bill of Rights's picture

Global banks issue alerts on China carry trade as Fed tightens and yuan falls - Telegraph

 

 `Citigroup tells clients to brace for second phase of the "taper tantrum" that rocked emerging markets last year, but this time with China at the eye of the storm''

Wed, 04/02/2014 - 08:58 | 4616801 adr
adr's picture

Awesome, where's the 5sq ft apartment I can buy for $6,000 that I can flip for $10k in a few months?

Hey you can stand up in 5sq ft. Mount a pillow to a wall.

Wed, 04/02/2014 - 09:07 | 4616831 Oh regional Indian
Oh regional Indian's picture

All New Yonkers are Japanese now...

I have a record of getting my car towed or Ticketed every trip I made to NY, NY. Nasty city full of people without manners, too much money, too little space, too many labyrinths, too many reptilians, super pizza, great food all around...but that is only 2 out of 20...

Like everyone is being herded into more and more unliveable cities...

Perhaps disease is intended to be the vector this time again....

tch...and I live in one such craphole of a city myself, Bangalore.

Pissed!!!! And I can smell it too!

ori

Wed, 04/02/2014 - 09:23 | 4616923 Squid Viscous
Squid Viscous's picture

you don't want to go to Yonkers either... trust me

Wed, 04/02/2014 - 09:33 | 4616963 Oh regional Indian
Oh regional Indian's picture

That was my little inside joke. I know of what you speak.

I even endured the Brooklyn Navy Yard for releasing a towed car....now that is a badge of honour right there!

Wed, 04/02/2014 - 10:18 | 4617151 Hohum
Hohum's picture

ORI,

Why don't you take the subway or bus?  I hear they are plentiful there.

Wed, 04/02/2014 - 11:12 | 4617359 Thisson
Thisson's picture

Because he's a moron who can't obey basic traffic rules, obviously.  Although I guess he doesn't have much practice with that, being a resident of Bangalore.  But seriously, his description of NYC is completely false. 

Wed, 04/02/2014 - 11:53 | 4617490 Oh regional Indian
Oh regional Indian's picture

@Hohum, years ago and I'd be driving in from College in Upstate.

Beautiful drive, just, all those monday here and tuesdays you sit on a freezing morning with your car running and your coffee and paper to grab the parking spot across the street. Repeat every 3 days!!!!. Since 0430!

And @ Thissen, NY traffic is way worse than bangalore, my own countrymen and pakistani cabbies....oh brother.

+ don't be so attached to a city. Or it's people, of course there are good folk in NY, but overall, terrible.

Wed, 04/02/2014 - 12:14 | 4617555 ebworthen
ebworthen's picture

There are no rude people, giant rats, or stop and frisk cops; it's a shining city on a hill full of humble friendly folks.

*cough*

Wed, 04/02/2014 - 09:33 | 4616962 thorgodofthunder
thorgodofthunder's picture

I own income producing real estate in NYC. Thank you Fed.

Wed, 04/02/2014 - 10:38 | 4617237 teslaberry
teslaberry's picture

i watched one of your videos, i thought you lived in the southwest or cali or soemthing. you were playing the guitar at a ted talk and being all hippy. it was cute.

Wed, 04/02/2014 - 09:01 | 4616814 foodstampbarry
foodstampbarry's picture

Pump Mr. Yellin! Pump!!

Wed, 04/02/2014 - 09:05 | 4616824 Squid Viscous
Squid Viscous's picture

can't wait for TSHTF, manhattan will be a survival of the fittest hell-hole within 72 hours...

Wed, 04/02/2014 - 09:07 | 4616836 Platinum
Platinum's picture

The vine's will be interesting.

Wed, 04/02/2014 - 09:57 | 4617059 Rukeysers Ghost
Rukeysers Ghost's picture

"Sad story. You got a smoke?"- Snake Plissken

 

Wed, 04/02/2014 - 09:07 | 4616833 orangedrinkandchips
orangedrinkandchips's picture

It is like the old joke......how many mexicans live in NYC???

 

Take the number of basements and multiply by 12!!!

 

 

Wed, 04/02/2014 - 09:16 | 4616886 Squid Viscous
Squid Viscous's picture

at least most of them wouldn't throw you under a bus to make a few more shekels

Wed, 04/02/2014 - 09:21 | 4616914 annabelleballow
annabelleballow's picture

 

I can live with the fact that I am priced out from the real estate market.  What bothers me most is that I will have to hear Lawrence Yun tout this as success.

Wed, 04/02/2014 - 09:26 | 4616941 Ricky Bobby
Ricky Bobby's picture

The frustration of the newly minted [$250,000+] grads, not on the insider's fast track, must be palpable. The pressure of trying to live the urban elitist dream, fucking bonus won't buy a one bedroom in North Bergen. It's not fair they were taught they would live forever and be part of the new nobility. I guess they need to just sleep at the office, live off Starbucks, granola bars, and cocaine.

Wed, 04/02/2014 - 09:28 | 4616943 LoneStarHog
LoneStarHog's picture

Hey, Whore Street, why don't you tell the COMEX to start a PAPER MARKET for Manhattan properties?  No physical buildings behind the paper; just naked paper.  Ya know?  Your Supply & Demand thingy?  C'mon you FRIGGIN WHORES, start a PAPER MARKET to set the prices of the PHYSICAL MARKET and test your Supply & Demand CRAP!

I guess everyone is buying Manhattan properties in the belief that under Kruggman's Broken Window Thesis insurance gains will be substantial when Mr. Obozo's greatest fear of New Yawk Shitty being NUKED is realized.

Wed, 04/02/2014 - 09:36 | 4616975 thorgodofthunder
thorgodofthunder's picture

It's called a Multi-Family REIT and their shares have performed quite well over past 5 yrs. Why did they destroy shiny rocks you might inquire?

Income.

Wed, 04/02/2014 - 10:24 | 4617180 LoneStarHog
LoneStarHog's picture

The typical diversionary response that one encounters on any of the so-called financial news outlets, including an attempt to discredit precious metals.  Which of the Whore Street firms employs your ass?

Wed, 04/02/2014 - 12:52 | 4617710 thorgodofthunder
thorgodofthunder's picture

I employ myself.  I made a fortune buying income producing real estate in prime market.  NYC is one of them.

Wed, 04/02/2014 - 11:15 | 4617368 Thisson
Thisson's picture

Shiny rocks can provide income too.  Any commodity can be monetized to provide income, if you're willing to take the corresponding risk.  TANSTAAFL.

Wed, 04/02/2014 - 12:13 | 4617562 ebworthen
ebworthen's picture

"...over past 5 yrs...."

First mistake (er...second?).

Wed, 04/02/2014 - 09:50 | 4617034 Its_the_economy...
Its_the_economy_stupid's picture

when the price goes up its econ 101, when the price goes down its unseasonably cold weather

Wed, 04/02/2014 - 10:03 | 4617089 pragmatic hobo
pragmatic hobo's picture

how many buyers were chinese?

Wed, 04/02/2014 - 10:14 | 4617118 Smiley
Smiley's picture

Why are people who pay to live in what are essentially concrete jail cells so obsessed with the notion that doing so somehow makes them a person of status?  

When viewed from space major metropolitan areas look like giant zits to me. 

Wed, 04/02/2014 - 11:18 | 4617381 Thisson
Thisson's picture

It has nothing to do with status.  If you want a high paying job in NYC you need to work long hours.  If you have a long commute to a place where housing is more affordable, you are at a competitive disadvantage compared to those who save 1-2 hours a day commuting, in terms of competing for promotions and raises, or in winning sales.  Status is having a large house in a tony part of CT or the hamptons.  You live in NYC if you don't have kids yet, or if you're making a high combined income.  Otherwise you can't afford it.

Wed, 04/02/2014 - 13:34 | 4617853 Smiley
Smiley's picture

I guess I'm not cut out for the metropolitan life then because I just don't get it.

For a region with no more heavy industry, super expensive union labor, restricted civil liberties, heavy mob influences, and no means of sustaining itself for more than a couple days without importing all food/water/medicine/fuel/energy/consumer goods via dilapidated infrastructure systems I am at a loss why major businesses bother putting up with all the headaches of operating in NYC.  In this technological age I don't see why you can't just do the same paper pushing bullshit in Fargo for pennies on the dollar vs doing the same paper pushing bullshit in New York City at a humungous price premium.

If there were actual resources to exploit I could see it; but it is nothing but a bunch of concrete LEGOS.  Aside from status of saying you live in NYC, I seriously do not understand why people and businesses put up with the hassle.  The numbers do not make sense.

Wed, 04/02/2014 - 11:54 | 4617502 _SILENCER
_SILENCER's picture

Manhattan is a goddamn prison.

It's a prison with great restaurants, but it's a prison.

Wed, 04/02/2014 - 11:04 | 4617333 thamnosma
thamnosma's picture

My god, who ARE all these people?  How can there be millions with cash money at such prices?   I lived in Manhattan for over 10 years back in the 80's.  A vibrant artistic place with rental prices for all or most income brackets.  There are hundreds of thousands of units.   I just find it confounding who the buyers are.  Nothing but rich corrupt foreigners, is that it?

Wed, 04/02/2014 - 11:18 | 4617382 Thisson
Thisson's picture

And rich corrupt locals (in finance, real estate, law, consulting, etc.).

Wed, 04/02/2014 - 13:13 | 4617778 Totentänzerlied
Totentänzerlied's picture

"How can there be millions with cash money at such prices?"

Cities are black-holes of resources, particularly money. Where wealth goes to die, more or less.

Wed, 04/02/2014 - 11:45 | 4617473 Puncher75
Puncher75's picture

When the crunch comes, how many rats can realistically scramble through the Lincoln / Holland Tunnels and get out?  Not many I suspect.

Wed, 04/02/2014 - 11:51 | 4617487 _SILENCER
_SILENCER's picture

God, Imagine all these ivy league fucktards, people with first names like Chad, Madison, Creighton, Jameson, Morgan, and Thornhill, trapped in their blind idiot temples to themselves as things go shithouse on the fetid streets below, ignited by their financial fuckery.

At some point, the plebes will find the stairs and the elevator shafts. They will climb upward.  And it is a long screaming fall to the pavement below.

Wed, 04/02/2014 - 11:53 | 4617495 Notsobadwlad
Notsobadwlad's picture

Inflation caused by excess debt-money in the market. My guess is that the apartments are not being purchased by people who add value to the economy.

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